Other Things Equal, Diversification Is Most Effective When

question 65

Multiple Choice

Other things equal, diversification is most effective when

• A) securities' returns are uncorrelated.
• B) securities' returns are positively correlated.
• C) securities' returns are high.
• D) securities' returns are negatively correlated.
• E) securities' returns are positively correlated and high.

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Definitions:

Organized

The state or condition of being systematically arranged and structured, often referring to ordered and efficient setups in biological, social, or physical systems.

Mitochondria

Organelles found in the cells of nearly all eukaryotic organisms, responsible for producing energy through cellular respiration.

ATP

Adenosine triphosphate, a molecule that stores and transfers energy within cells, acting as a universal energy currency for cellular processes.

Laws of Physics

The laws of physics are the fundamental principles that describe the behavior of the physical universe, including concepts of energy, motion, forces, and matter interactions.